When even a Tory Prime Minister is admitting it, you know free markets have failed

TWO of the biggest bits of Thatcherism took a real battering this week – but you’d be forgiven for hardly noticing. While all eyes were on the usual suspects – Brexit, Trump, Russia and the horrors of the Florida school shooting, followed by the equally powerful anti-gun mission born in its young survivors, a little speech about university tuition fees in England looked relatively insignificant. Yet at Derby College – before an audience of suits and apparently not a single student – Theresa May spoke about the total failure of her own government, party and indeed the whole marketization agenda adopted by all Tory and Labour governments, since Maggie starting flogging off the family silver in the 1970s.

The Prime Minister said: “The competitive market between universities which the system of variable tuition fees envisaged has simply not emerged. All but a handful … charge the maximum possible fees for undergraduate courses. Three-year courses remain the norm. And the level of fees charged do not relate to the cost or quality of the course. We now have one of the most expensive systems of university tuition in the world.”

Jings. Who would have guessed that might happen if you allowed universities to charge £9k a year in a fairly deregulated system?

The media concentrated on the absurdity of her suggested remedy – instead of having to pay £27,000 over their university career, English students might “only” have to pay £20,000. Wow. See radical – see Theresa.

Spectator columnist Alex Massie acidly observed: “A policy which says, ‘We feel your pain. So instead of hitting you with an axe we will hit you with a hammer’ is not a good policy. Worse, it is terrible politics; the kind of politics which makes you despair.”

Well aye. But nestled in all the flummery surrounding that strange, semi-admission of guilt for the torrent of debt unleash on English students, sat an unremarked upon wee gem.

Back in 2010 when she was Home Secretary in David Cameron’s Coalition government, Theresa actually believed creating an upper limit for tuition fees of £9000 a year, would prompt some “entrepreneurial” universities to spot the chance to stack ‘em high, and charge less for some courses. But they didn’t. Who would have guessed that would happen?

Just everyone in opposition, education policy specialists, students and indeed any sentient being alive in Britain since the days of Maggie and the systematic crushing of the public service ethic in England.

Yet Theresa May somehow thought folk urged to run universities like businesses would restrain themselves? It’s strange that a woman who spends so much time with big business, big industry and big cheeses could be so naïve about the workings of an unregulated market, and its in-built tendency towards complacency and greed. She also seemed surprised the Tories marketization of higher education had resulted in vice chancellors paying themselves top whack as if they were captains of industry. Who could guess that might happen?

But there has been no collapse in university application by poor students in England since fees went up. This seems to be because universities used tuition fees to invest in bursaries and outreach schemes. Research also suggests most of the gap between richer and poorer students opens up at secondary school not university, so the money raised from tuition fees would be better spent there instead.

Well quite. More money, spent earlier in young lives – not just in education, but across society – visibly improves outcomes. And bursaries provided by a few benevolent universities only proves that a more humane system like free higher education along with student grants is probably the best solution of all.

But what is Theresa’s problem? Logically, she should be urging universities to double, even treble fees if it makes no difference to uptake. So why is the Prime Minister bothered about this, and why now?

Apparently May’s been determined to make universities offer variable fees but was stymied by former education secretary Justine Greening. Her departure earlier this year cleared the way for a new approach – and lo, a brand, spanking, new, ambitious policy was born, with slightly lower tuition fees and the prospect of a two-tier degree system south of the border with arts degrees costing less than science.

Obviously, though, the biggest influence has been the popularity of Labour with young voters and parents after Jeremy Corbyn’s snap election promise to copy Scotland, scrap tuition fees entirely and reintroduce maintenance grants for poor students. But regardless of the real reason, Theresa’s frank acknowledgement of market failure in higher education was a significant moment.

Likewise, even farther from the public gaze another tenet of Thatcherism got a big dissection this week with the publication of a report by Locality, challenging the “big is beautiful” assumption in the way public services are run.

Researchers with Locality – a network of community enterprises and social action centres in England – conducted hundreds of in-depth studies into thousands of demands placed on the public and third sector over the past three years.

In one study, they analysed 60,000 demands on a local authority adult social care service over a year. In short, this was detailed and innovative because work started with service users and then counted every demand they made across organisational boundaries, stopping only when the original need was met, as perceived by the individual, not the organisation

And what did they find? The scale and standardisation so beloved of the Tories have become the problem, not the solution.

The main problem is failure to resolve problems. One community health trust discovered less than one per cent of demand was resolved at the first point of contact.

An 80-year-old contacted his local authority asking for desperately needed respite care but was just sent a leaflet and told to get in touch with Age Concern.

Leaders of one healthcare system found 86 per cent of the demand hitting their system was from people already known to them – with unresolved problems. An adult services contact team found not a single call contained a new query: everyone contacting the system had been in touch before. You get the drift.

These are the dynamics of race-to-the-bottom Britain. Large, tendered out contracts won by large, uncaring companies who cannot produce genuine economies of scale because they cannot solve problems – problems which are eminently fixable if people are given time, money, encouragement and space to shape the solutions themselves. This is not wishy-washy Pollyanna thinking. Locality’s report destroys one of the key presumptions underpinning marketised Britain –the market knows best. Instead researchers found that the market, operating in areas of social policy that should never have been driven by the profit motive, simply creates more business for itself.

Locality found that counter to hysterical tabloid headlines, real demand for most public services is not rising. Artificial demand created by organisations is rising – because they offer badly designed services which fit everyone into the same standardised boxes, regardless of real need. It’s a pretty important finding because it means no further cuts or crude attempts to “manage” demand are needed.

What is needed are well-designed public services able to do the right thing for people the first time round – through a move away from a small number of remote, managerial hubs who’ve clinched contracts by automating, standardising and anonymising human processes to a network of local centres working with far greater autonomy.

Locality reckons such a shift could save £16 billion annually across England. That could mean a £1.6bn saving in Scotland. If we act.

Scots have almost instinctively pushed back on the big areas of privatisation when the Scottish Parliament has been able.

But still, the presumption big is best and efficient pervades government north and south of the border. It’s time we consciously unpicked that presumption from our society – along with the idea competition invariably improves lives; myths and lies most of mainland Europe never fell for.

It may surprise and even shame Theresa May that unfettered, unregulated market control produces a warped society. Supporters of Scottish independence got there a long time ago.

Ipsoregulated

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